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Coronavirus, the Halving and a Price Drop: Bitcoin Mining Marches On

Despite the global turmoil caused by the coronavirus and a looming reward halving, the Bitcoin mining industry appears optimistic.

The post Coronavirus, the Halving and a Price Drop: Bitcoin Mining Marches On appeared first on Bitcoin Magazine.

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CoinShares, a New York-based cryptocurrency service that provides advice and other services for investors, released a statement on the state of Bitcoin mining during the global uncertainty caused by the coronavirus, ahead of a planned, more thorough June 2020 mining report.

In it, CoinShares’ research director Christopher Bendiksen wrote that the current talk of a possible mining “death spiral” due to coronavirus-based lockdowns makes for dramatic reading, but is not at all based in reality.

“‘Mining death spirals’ do not actually happen in real life,” Bendiksen wrote in the statement. “They are highly theoretical edge cases without any historical real-world precedent … Mining is here to stay.”

Confidence in the mining space and in bitcoin generally, despite economic uncertainty around the world, is high at the firm.

“Bitcoin is arguably the only financial asset that can operate remotely — nobody needs to go to work to make bitcoin work,” Danny Masters, executive chairman of CoinShares, wrote in a supplementary statement sent to Bitcoin Magazine. “Nobody needs to fill an ATM machine. While things look bleak for everything, I can’t think of a better asset to buy than bitcoin.”

Difficulty, Block Frequency and Hashrate

The cost of Bitcoin mining is largely a function of the difficulty — a dynamic metric determined by the protocol itself that can adjust both up and down to keep block times at 10 minutes on average.

The difficulty has reset downwards many times — sometimes dramatically as the result of a pullback in price, as in November and December of 2018 — but the network has never ground to a complete halt or even come anywhere close to doing so.

“There is no price level that could cause Bitcoin’s emission rate to increase,” reads Benedickson’s statement. “When the dust settles on the current financial crisis, the Bitcoin monetary system will have created exactly as many bitcoins as originally intended.”

In essence, the Bitcoin mining difficulty adjustment keeps Bitcoin block frequency steady, no matter the amount of total network hashrate.

What About the Halving?

“If prices do not recover, the hashrate will fall — and when the halving hits, it will fall again,” wrote Bendiksen. “This is not a problem for Bitcoin, nor is it unprecedented.” 

And it’s not always the biggest bitcoin mining groups that will survive a major bitcoin price recession, contrary to what you may be hearing. It will be the groups that have the cheapest energy costs and the newest, most efficient hardware.

“The halving is still a couple months away and many miners are already closing up shop,” Bendiksen said in a follow-up interview with Bitcoin Magazine. “So, at the time of the halving, we will likely be in a completely different difficulty environment than now. Recent estimates show that as much as 25 percent of the peak-level hashrate may already have been turned off.”

While CoinShares suggests that post-halving mining will be different than the current and near-future mining environment, Bendiksen does believe today’s status offers an insightful window.

“For all of those who are worried about the halving, this is a perfect prelude because the end effect on miners is the exact same,” he wrote in his statement. “Hence, the hashrate dynamics we’re likely to see in the upcoming weeks will be an excellent parallel to those we might also see after the halving in May.”

Bendiksen acknowledged that some of the higher-cost miners may drop out after the halving, but he also sees mining companies stabilizing and building for the foreseeable future.

Building the Mining Infrastructure of the Future

Meanwhile, Blockstream Mining is quietly building its mining business with facilities in Quebec, Canada and Georgia, USA, with over 300 MW of energy and a thriving colocation service offering equipment, space, bandwidth and power rental for miners who can benefit from inexpensive energy without needing to negotiate separately with local authorities. 

According to Blockstream CSO Samson Mow, the company has taken steps to be ready for the halving, come what may. Despite the current turmoil, it is focused on the long term.

“For Blockstream’s mining operations, our electricity and operational costs are low enough that we can outlast most miners and be the last ones standing,” Mow told Bitcoin Magazine in an interview. “Also, we’ve mined bitcoins for quite some time and we HODL for the medium term, so a price drop during the halving would actually have no impact for us.”

Mow noted that, while it’s hard to predict the price, he believes some inefficient miners may need to shut off, while most miners will be fine through the halving.

“I think the bitcoin price will recover to a point where, post-halving, it will still be profitable to mine BTC,” Mow said. “Even if that doesn’t happen, it’s not likely we will see a massive drop in hashrate. Many miners are already on the latest generation of equipment and have already recouped those costs, so they only have to deal with opex [operational expenditures].” 

Investors Are More Cautious But Still Interested in Bitcoin Mining

Ryan Porter, head of business development for mining-focused financial services and brokerage firm BitOoda, was busy fielding inquiries about new North American mining opportunities in December 2019.

Now, he said, he’s still getting inquiries but potential mining companies are more cautious and want to lock in competitive energy pricing.

“Overall, what we’re seeing is the miners that were well positioned to be profitable after the halving are still well positioned now, where the miners that would have needed to shutter operations have had to fast track those plans,” Porter told Bitcoin Magazine in a phone interview. 

“We’ve seen hashrate fall precipitously as now unprofitable mining rigs are being taken offline, and conservative operators who were thoughtful about managing their bitcoin price risk are now looking to purchase hardware at distressed prices.”

Porter is confident that the best-managed mining operations that have inexpensive power sources and efficient computers will survive the halving. What he’s seeing is the next stage in the evolution and maturation of the mining industry.

“Where we are starting to see a change in planning for miners is how they’re approaching risk management,” he added. “We had previously engaged with miners on implementing BTC price-hedging programs, and we’ve had quite a few of those firms reach out to us over the past week to start a meaningful risk management engagement.”

The CoinShares team is confident that bitcoin and its critical mining industry will ride out the coronavirus storm. In his interview with Bitcoin Magazine, Bendiksen noted that, unlike the fiat monetary system, the bitcoin system is “run coldly and unemotionally by a network of computers according to pre-set rules.”

“These computers never need to work from home, never get sick, scared or panicked and can not be influenced to print money by charismatic or powerful politicians, even in the most challenging times,” he said. “They simply execute their code as prescribed, no matter what is happening in the world.”

Mining is one of Bitcoin’s most critical practices, but also one of its most misunderstood.

Our guide to bitcoin mining covers everything from the basics of where bitcoin come from and why this process is called “mining” to bitcoin mining centralization and energy use. You’ll find detailed information on bitcoin mining hardwarebitcoin mining poolsbitcoin mining profitabilitybitcoin mining legality and more.

And, if you’re looking for something specific, we have hundreds of articles that have taken deeper dives into the mining industry since the earliest days of Bitcoin.

Get started with “What is Bitcoin Mining?”!

The post Coronavirus, the Halving and a Price Drop: Bitcoin Mining Marches On appeared first on Bitcoin Magazine.

Source: https://bitcoinmagazine.com/articles/coronavirus-the-halving-and-a-price-drop-bitcoin-mining-marches-on?utm_source=rss&utm_medium=rss&utm_campaign=coronavirus-the-halving-and-a-price-drop-bitcoin-mining-marches-on

Blockchain

SPELLFIRE: First NFT That You Can Actually Touch

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[PRESS RELEASE – Please Read Disclaimer]

Spellfire’s History in the NFT Landscape

Non-fungible tokens (NFTs) took the world by storm in recent months by rapidly expanding out of the score of the cryptocurrency space. Representing a valuable model of digital ownership allowing users and investors to make money garnered the attention of the crowd.

Similarly to physical features, like cash or money in banks accounts, users can employ the NFTs they bought with the help of digital assets, typically on the Ethereum blockchain. Somewhat expectedly, the possibility of speculating with prices drove enhanced volatility in the NFT markets as well. Despite this, though, the realm of non-fungible tokens remains as real as ever.

This provides opportunities for new projects, like the fantasy game Spellfire, which are willing and ready to take advantage and be the wind of change in that matter.

Spellfire – Unique Experience of Owning in-game Cards in Real Life

Spellfire is a fantasy game that presents players with unique experiences in the magical world consisting of lands like Bloodborn, Wet desserts, or The Holy Deadlands. Many users could dive into an ecosystem full of bewitchment that will probably remind you of your favorite fantasy movies or series.

Kings and witches, good guys and evil forces, wars and reasons: the project provides you with everything that a great fantasy game should have and sometimes even more. The digital version suggests hundreds of carefully and artistically designed game cards that represent different characters within several distinctive levels.

With these kinds of games, usually, everything stays in the digital world. However, this is not precisely the case with the current growth of NFTs. The team behind the “Spellfire” took a revolutionary road by presenting the ability to buy real world cards of the game.

The most loyal and engaged fans or people who maybe see the collecting benefits may buy game cards with NFT. Being the digital ledger in a certain way similar to cryptocurrency assets, each NFT is unique and in this instance, could represent real-life goods, like a game card.

You could have it at home, real as any other thing you buy with money, but in the digital world, one card could be highly valuable and simply make you money on its own.

Fighting Evil Monsters and Making Bank Never Been so Easy

If more users get engaged in the market by selling, buying, and reselling, prices go up and down rather rapidly. This enabled already involved users to make more money. In this instance, let’s say you bought “Spellfire’s” Arcana: Fire card which is interactive and upgradable.

After some time, you decide to sell it, you look at the market prices and activities and you follow the moment when prices peak the most: then it is time to sell – if, of course, you are able to catch that top. In this way, having real cards makes the whole experience way better and almost surreal. Players don’t only have part of the virtual world with them but could also see what is helping them make money.

Spellfire allows everyone involved to become a part of the revolution, which connects the past with the future. You own quite a common game card but in reality, you are involved in something surreal and futuristic.

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Source: https://cryptopotato.com/spellfire-first-nft-that-you-can-actually-touch/

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Indian government cautious about crypto-adoption, CBDC is a possibility

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Indian traders and exchanges might be bullish about the crypto market, but the Indian  government doesn’t seem keen on rushing into the scene. At least, not until studying its homegrown fintech industry and the anti-Bitcoin protests in El Salvador.

Tracking global news

Indian finance minister Nirmala Sitharaman in a recent interview with Hindustan Times explained why the country seemed to be falling behind when it came to crypto adoption.

Though she admitted, El Salvador wasn’t “the best example,” Sitharaman said,

“You’d think common people don’t care about digital currency; but the public took to the streets against the move. It’s not a question of literacy or understanding – it’s also a question of to what extent this is a transparent currency; is it going to be a currency available for everyone?”

Sitharaman referred to CBDCs as a “legitimate” cryptocurrency and admitted there could be a “possibility,” in hat regard. She noted that India held the “strength of the technology” and acknowledged the need to formulate a Cabinet note. However, Sitharaman wondered if India was ready to follow El Salvador’s way.

Facts on the ground

Though accessibility is a pressing concern, more Indians have discovered crypto than perhaps expected.

Nischal Shetty, CEO of the Indian crypto exchange WazirX – a subsidiary of Binance Holdings – has stated that WazirX sign-ups from India’s tier-two and tier-three cities overtook those from tier-one cities this year. Even so, sign-ups from tier-one cities themselves saw a 2,375% rise. Furthermore, WazirX added one million users in April 2021 alone.

Adding to this, the cost of electricity and Internet data in India are relatively cheaper, which could boost both crypto trading and mining in the future. However, at the last count, there was only one Bitcoin ATM in the whole country.

As per data by Useful Tulips, which combined data from Paxful and LocalBitcoins, India saw transfers worth around $4,502,369 in the last two weeks.

Could anti-Bitcoin protests happen in India?

There is evidence to support both sides. India has a strong history of mass protests, with the farmers’ protests against the government’s agricultural laws being one such example. The 2016 demonetization of part of the country’s paper currency still haunts many, and Internet penetration is yet to cross 50%.

However, India also has the largest diaspora in the world, with approximately 18 million people living outside the country. Crypto innovation could lead to hundreds of millions of dollars being saved on remittance charges as money is sent across borders.

But for the time being, it seems India’s urban residents are more bullish about crypto than its government.

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Source: https://ambcrypto.com/indian-government-cautious-about-crypto-adoption-cbdc-is-a-possibility

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Assessing the odds of Solana dropping below $100 soon

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A $100 investment in Solana a year back would have led to a $5000 return on investments right now. The digital asset has undoubtedly taken the market by storm and over the past couple of months, its valuation has parabolically risen.

However, thanks to a major invalidation on the daily chart, a correction is possibly due for the token now. Especially since bullish momentum is collectively taking a hit across the industry.

Solana is no longer rallying on its own. And, according to recent developments, it might undergo a period of correction over the next few weeks.

Levels to keep track of during Solana’s correction 

Source: Trading View

Analyzing the current market structure of Solana, the asset hit an all-time high of $215 on 9 September. However, it was unable to hold a position above the $200-level for long. With Bitcoin consolidating strongly between $45,000 and $50,000 during that period, Solana may have found it relatively easy to continue on its bullish path since liquidity and capital flows were evident across the industry.

However, with bearish dynamics coming into play now, it is important to understand the liquidity pools presently evident for the asset. One major invalidation faced by Solana at press time was the crossover between the 20-Simple Moving Average and 20-Exponential Moving Average.

The SMA moving above the EMA on the daily timeframe is considered a strong bearish signal. At the time of writing, for instance, the asset was well away from any form of recovery.

Source: Trading View

Now, in terms of identifying levels, Solana’s previous trend suggested that the asset has a tendency to bounce back from the 0.618 Fibonacci level. During the early 2021 rally, the asset went up to $64 before dropping down to $23 in the month of July. A similar reciprocation of trend would see Solana drop below the $100-mark, with the current 0.618 Fib line residing around the $96-mark.

As far as support is concerned, the previous high of $64 is a strong weekly level. It might get tested if bearish pressure persists across the ecosystem.

Institutions can still rescue its plot

Besides market corrections, Solana hasn’t been followed by positive development since its network witnessed a 17-hour downtime following a DDOS attack. The downtime has been speculated to be one of the primary reasons for the 35% collapse last week.

However, to be fair, SOL‘s credentials were already shaky above $200, and profit-taking was at large.

On the contrary, according to Coinshares‘ digital asset fund report, institutions have overlooked Solana’s minor hiccup as the asset class registered another $4.8 million in capital inflows.

While that is positive, it is important to note that such capital investments are made with the future in mind. Not immediate returns. Hence, recovery on the basis of this investment may or may not unfold since profit-taking on the retail side of the market controls the larger market.

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Source: https://ambcrypto.com/assessing-the-odds-of-solana-dropping-below-100-soon

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